In the world of finance and credit, certain players have become huge game changers. Unsecured business loans are one of them. Now, why is that so? Alternative Bridging is here to help us answer that question.
Defined, unsecured business loans are issued and supported only by the borrower’s creditworthiness instead of a type of collateral like a fixed property. Simply put, lenders will only bank on your creditworthiness thereby keeping your properties safe from any risks of forfeiture in case of inability to fulfill payment terms.
Of course, with the high amount of risks for lenders the interest rates may be a little higher compared to a mortgage. At the same time, only individuals or entities that have a good credit standing are likely to be approved.
The very reason why they are considered a game changer is because they cater to a certain group that may not be serviced by other forms of credit that require capital. These are individuals or companies who do not have enough equity in their names for them to be approved a bank loan, a mortgage or any other similar type of credit. Another charm that unsecured business loans have is that in the event of bankruptcy, the court may discharge unsecured loans, unlike secured ones.
Now, how do you manage to get your application approved? We’ll let you in on a few tips below. Read on.
- Get your financial reports ready. This will always be asked of you anyway so it is best if you prepare for it early on. It saves time and keeps you a few steps ahead. Remember that lenders and financers will gauge creditworthiness and one way to do this is through your financial records.
- Clean up your files and reports. We do not mean clean up as in “lie or manipulate”. This means that you should ensure that all your records are systematized, purports what they ought to report and are easily understandable.
- Be transparent with your intentions. It is easier to get any financing approved if you explain how you intend to use the funds. It creates a relationship of trust between you and the lender.
- Talk about repayment plans. Lenders will want to be repaid of the unsecured business loans you got from them. If you talk about your plans and methods of repaying then you get all the more chances of an approval says Alternative Bridging. It shows your sincerity in following through your responsibility and end of the bargain.